SPEECH 


GEN.  THOMAS  EWING, 


DELIVERED  AT 


Ironton,   Ohio,,  July 


COLUMBUS: 

[PUBLISHED  BY  ORDER  OF  DEM.  STATE  EX.  COM.] 
1875. 


SPEECH 


OF 


GENERAL  THOMAS  EWING, 


DELIVERED  AT 


Ironton,  Ohio,  July  249 


FELLOW-CITIZENS  :  I  shall  address  you  to-day  only  on  the  money  question.  It  is  not 
a  question  of  ordinary  politics  affectiug  indirectly  and  remotely  the  welfare  of  the  peo- 
ple. \It  is  of  present  and  paramount  importance,  aqd  concerns  every  one  \vho  is  person- 
ally engaged  in  industrial  pursuits,  or  whose  fortune  is  embarked  in  them. 

I  know  the  subject  is  one  almost  every  body  dislikes  to  study  or  discuss.  But  I  do 
not  offer  yon  an  abstract  disquisition  on  the  nature  and  offices  of  money,  on  which  po- 
litical philosophers  differ  and  confute,  as  did  the  schoolmen  of  the  Middle  Ages  on 
entities  and  quiddities.  I  ask  you  only  to  take  the  lamp  of  our  own  recent  experience 
as  a  people,  and  by  it  direct  your  steps. 

All  eyes  are  on  Ohio.  The  wonder  seems  to  be  that  the  Democracy  have  dared  to  take 
issue  with  the  finance  policy  of  tha  Republican  party — a  policy  of  rain  to  the  many  and' 
aggrandizement  to  the  few.  The  money  power  which  dictates  that  policy  assumes  to 
control  both  the  great  parties.  It  is  a  mighty  power — the  dread  legacy  of  the  war — 
which  gathers  from  all  parties  to  the  support  of  its  schemes  men  of  largest  control  in 
business,  politics  and  literature — the  Sir  Oracles  of  public  opinion.  It  has  heretofore 
ruled  our  National  finances  almost  without  dispute  through  its  instrument,  the  Repub- 
lican party.  Its  measures  are  exactly  those  through  which  its  prototype,  the  money 
class  of  England,  fastened  on  the  masses  of  her  people  a  burden  of  perpetual  debt  which 
they  can  barely  carry  and  live  ;  and  which  have  been  grafted  here  to  bear  precisely  the 
same  fruit.  It  is  a  power  which  brooks  no  determined  opposition  from  kin?  or  people. 
The  howl  of  ra<?e  and  torrent  of  denunciation  from  its  organs  which  now  greet  oar  ears 
bring  us  the  welcome  intelligence  that  the  arrow  from  our  Ohio  Convention  hit  the 
clont. 

THE  ISSUE  ON  THE  MONEY   QUESTION   STATED. 

The  issue  between  the  Ohio  Democracy  and  the  Republican  party  on  this  question 
may  be  succinctly  stated  thus  : 

''  'i>-  I'ppnblicans  say  the  moneyed  class  shall  determine  the  proper  volume  of  the  enr- 
*v  .  •  !•:<;  Democracy  say  tlie  people  shall  determine  it. 


2OO3086 


They  say  the  business  of  the  people  shall  conform  to  such  quantity  of  currency  as  the 
banks  can  keep  afloat  redeemable  in  gold  ;  ive  say  the  volume  of  currency  shall  conform 
to  the  wants  of  business. 

They  say  the  people's  money  shall  be  issued  by  pet  corporations ;  we  say  it  shall  be 
issued  only  by  the  Republic. 

They  say  the  people  shall  pay  interest  on  the  whole  currency  to  the  banks ;  we  say 
the  whole  currency  shall  be  part  of  the  debt  bearing  no  interest. 

They  say  the  interest-bearing  debt  shall  be  increased  over  four  hundred  millions  to 
buy  up  and  destroy  the  greenbacks  and  fractional  currency  ;  we  say  it  shall  be  reduced 
over  three  hundred  millions  by  substituting  greenbacks  for  National  Bank  notes. 

The  verdict  of  the  people  of  Ohio  on  these  issues,  rendered  after  full  discussion,  will,  I 
believe,  be  ratified  by  the  judgment  of  the  American  people.  I  have  no  fear  of  the  re- 
sult. If  it  b»  shown  that  the  policy  of  the  Democracy  involves  repudiation  or  a  wild 
scheme  of  imposture,  the  intelligent  and  conservative  masses  of  our  State  will  condemn 
it  without  instructions  from  Wall  street.  But  if  it  shall  appear  to  be  consistent  with 
National  honor,  and  demanded  by  the  interests  of  the  people,  the  truculent  billingsgate 
•with  which  it  has  been  assailed  will  ouly  emphasize  the  popular  verdict  in  its  favor. 

THE  RESUMPTION  LAW  PRESENTS  THE  ISSUE. 

The  whole  issne  pn  this  question  is  involved  in  the  act  of  January  14,  1875,  entitled 
•*'  An  act  to  provide  for  the  resumption  of  specie  payments."  It  provides  in  sufestance 
as  follows : 

1.  That  the  forty-eight  millions-  of  dollars  of  fractional  currency  then  outstanding 
shall,  "  as  rapidly  as  practicable,"  be  redeemed  with  silver  and  destroyed. 

2.  That  the  National  Banks  now  or  hereafter  established  may  increase  their  currency 
without  limit  of  aggregate  amount  by  deposit  of  United  States  bonds  as  security  under 
existing  laws. 

3.  As  each  $100  of  new  bank  money  is  issued,  $30  of  greenbacks  shall  be  redeemed 
and  withheld  from  circulation,  until  the  three  hundred  and  eighty-two  millions  of  dollars 
of  greenbacks  then  outstanding  be  reduced  to  three  hundred  millions. 

4.  On  and  after  tke  1st  of  January,  1879,  all  the  remaining  greenbacks  shall  be  re- 
deemable on  demand  in  coin ;  and,  once  redeemed,  shall  not  l>e  re-issued 

5.  The  Secretary  of  the  Treasury  is  required  to  provide  the  coin  for  these  redemp- 
tions, and  authorized  to  sell  five  per  cent,  gold  bonds  to  buy  the  coin. 

THE  RESUMPTION  LAW  A  PARTY  MEASURE. 

This  act  is  the  climax  of  the  finance  policy  of  the  Republican  party  since  the  war. 
That  party  must  stand  or  fall  by  it.  It  was  reported  by  Senator  Sherman  from  a  Re- 
publican Congressional  caueus  and  passed  under  the  gag  of  the  previous  question  by  a 
party  vote — the  Democracy  to  a  man  opposing  it.  It  was  promptly  approved  by  the 
President,  and  was  in  effect  indorsed  by  the  Republicans  of  OMo  in  State  Convention. 

Here,  then,  is  the  issne.  Shall  that  law  be  carried  out  or  repealed  ?  Let  the  people 
of  Ohio  and  the  Republic  consider  the  effect  of  its  provisions  and  answer. 

OUTY-FOUR  MILLIONS  FRACTIONAL  CURRENCY  TO  B'S  DESTROYED— MORE  CONTRACTION — 

MORE  TAXES. 

On  the  8th  of  this  month  the  Secretary  of  the  Treasury  announced  that,  by  authority 
and  command  of  that  law,  he  had  sold  five  per  cent,  bonds,  and  with  the  proceeds  pur- 
chased ever  ten  millions  of  silver  coin  to  redeem  and  destroy  fractional  currency.  He 


has  thus  added  five  hundred  thousand  dollars  to  the  annual  taxes  of  the  people.  He 
declares  his  purpose,  and  Is  bound  by  the  law,  to  go  on  and  increase  the  bonded  debt  in 
purchase  of  silver  to  redeem  and  destroy  the  remainder  of  the  fractional  currency, 
which  will  make  an  aggregate  increase  cf  the  annual  taxes  of  over  two  millions  and  a 
half  of  dollars. 

What  good  is  to  be  attained  by  this  large  increase  of  the  debt,  when  the  people  are 
struggling  under  an  almost  insupportable  load  of  disaster  and  taxation,  and  when, 
owing  to  the  paralysis  of  business,  the  revenues  of  the  General  Government  fall  short 
of  its  expenses,  and  bonds  are  being  sold  to  meet  the  deficiency  ?  Will  it  furnish  the 
people  a  silver  fractional  currency  ?  If  it  would,  call  we  afford  to  pay  two  millions  and 
a  half  of  dollars  annually  for  the  difference  between  one  fractional  currency  and  the 
other — one  having  as  ninch  purchasing  power  and  convenience  as  the  other — the  only 
difference  being  that  one  c/iinfcs  in  the  pocket  and  the  other  doesn't  ? 

But  it  will  not  furnish  the  people  a  silver  .fractional  currency.  It  will  destroy  what 
they  have  and  leave  them  none.  The  banks  and  brokers  will  buy  up  the  silver  for  the 
premium.  Two  or  three  per  cent,  would  be  ample  inducement  for  the  purchase ;  and, 
as  silver  commands  eight  per  cent,  premium,  it  is  folly  to  expect  it  to  remain  in  circula- 
tion. 

What  do  you  say,  then,  fellow-citizens,  to  this  provision  of  the  act — this  addition  of 
two  and  a  half  millions  to*  our  yearly  taxes — this  holocaust  of  our  indispensable  frac- 
tional money — this  contraction  of  the  currency,  forty-four  millions  of  dollars  and  the 
further  shrinkage  of  values  and  destruction  of  business  which  must  follow  ? 

BANK   CURRENCY   BEING   CONTRACTED  $213,000  A   DAY. 

But  this  is  only  the  first  step  to  specie  payment.  Let  us  see  what  the  next  has  and 
will  cost.  This  act  provides  for  any  increase  of  National  Bank  circulation  which  may 
be  desired,  and  the  withdrawal  from  circulation  of  greenbacks  to  the  amount  of  eighty 
per  cent,  of  smch  increase  until  the  volume  of  greenbacks  be  reduced  to  three  hundred 
millions.  This  was  the  tub  thrown  to  Morton,  Logan  and  such  other  Western  or  South- 
ern Republicans  as  demanded  an  increase  of  the  currency.  They  were  either  fooled  by 
the  provision,  or  betrayed  their  convictions.  Its  effect  in  connection  with  other  pravi- 
sions  of  law  has  been  to  largely  contract  the  currency.  Under  its  operation  up  to  April 
1st,  three  and  a  half  millions  of  new  National  Bank  notes  were  issued  and  nearly  three 
millions  of  greenbacks  destroyed.  But  up  to  the  same  date  over  seventeen  millions  of 
bank  currency  were  surrendered  and  destroyed;  the  net  result  being  a  contraction  of 
the  currency  over  sixteen  millions  of  dollars  in  seventy-five  days  after  the  passage  of 
the  act — two  hundred  and  thirteen  thousand  dollars  a  day  I 

ALL  THE  GREENBACKS  TO  BE  DESTROYED— MORE   CONTRACTION — MORE  TAXES. 

The  act  next  makes  it  the  duty  of  the  Secretary  of  the  Treasury  to  provide  gold  to 
redeem  all  the  greenbacks  outstanding  on  the  1st  of  July,  1879,  and  issue  five  per  cent, 
bonds,  if  necessary,  to  buy  the  gold.  How  much  gold  will  be  required  f  I  answer,  at 
least  an  amount  equal  to  the  sum  of  greenbacks  which  shall  remain  outstanding  on  the 
day  of  resumption.  As  there  is  no  probability  of  much  new  issue  of  National  Bank 
notes  in  the  face  of  the  provisions  for  specie  payment,  the  Secretary  will  have  to  provide 
from  three  hundred  and  fifty  to  three  hundred  and  seventy-five  millions  of  gold  by  Jan- 
uary 1,  1879.  How  will  he  get  It?  Not  from  revenues,  for  they  are  already  less  than 
expenses.  The  last  Congress  levied  thirty-five  millions  of  dollars  a  year  of  additional 
taxee,  and  it  is  believed  that  in  the  present  and  prospective  prostration  of  industries 


6 

-the  revenues  will  still  fall  short.  How  then  will  he  get  that  vast  sum  of  gold?  Only 
by  selling  bonds  for  gold,  from  month  to  month,  as  he  has  announced  his  purpose  to  do. 
That  is,  the  debt  is  to  be  increased  by  from  three  hundred  and  fifty  to  three  hundred 
and  seventy-five  millions,  and  about  twenty  millions  of  dollars  of  additional  taxes  lev- 
<«d  each  year  to  pay  interest  on  the  new  tends. 

FIFTY   MILLIONS   OF  SMALL  BANK  NOTES  TO   BE  DESTROYED — MORE  CONTRACTION. 

Another  feature  in  the  scheme  for  specie  payment  is  embodied  in  the  National  Bank 
Act  (Revised  Statutes,  section  5175),  which  provides  that  after  sp«cie  payment  shall  be 
resumed,  no  notes  of  less  than  five  dollars  shall  be  issued  by  the  banks,  thus  cutting  off 
fifty  millions  of  our  present  National  Bank  circulation  on  the  resumption  of  specie  pay- 
ment, and  leaving  the  people  neither  greenbacks,  fractional  currency  nor  small  bank 
notes. 

These  are  the  steps  to  specie  payment.  Their  cost  in  increased  taxes  will  be  over 
twenty-two  millions  of  dollars  a  year.  But  that  is  the  smallest  of  the  injuries  the 
movement  is  inflicting  and  will  millet  on  the  business  of  the  country.  Let  us  examine 
the  other  pernicious  effects  of  the  law. 

THE  AGGREGATE  CONTRACTION  REQUIRED  B^Y  THE  LAW. 

We  had,  on  the  30th  of  April  last,  four  hundred  and  twenty-two  millions  of  legal 
«nders  and  fractional  currency,  costing  us  nothing;  and  about  three  hundred  and 
thirty  millions  of  bank  currency,  costing  us  about  eighteen  millions  of  dollars  a  year. 
The  free  money  is  to  be  absolutely  withdrawn,  and  also  the  fifty  millions  of  bank  notes 
under  five  dollars,  thus  reducing  the  whole  currency  to  two  hundred  and  eighty  mil- 
ions  of  bank  money. 

We  will  be  told  that  the  greenbacks  will  not  be  presented  for  redemption,  because 
•when  resumption  occurs  they  will  be  worth  par  in  gold.  'But  with  the  large  demand 
for  gold  throughout  the  world,  and  the  acknowledged  meagre  supply — with  the  banks 
of  all  nations  struggling  for  it  to  keep  up  their  redemption  funds — with  all  national 
debts  payable  iu  it — with  our  home  demand  for  over  two  hundred  millions  annually  for 
•customs — and  an  export  in  excess  of  imports  of  sixty  millions  of  gold  annually — so 
arge  a  portion  of  the  treasure  of  the  world  could  not  be  kept  hoarded  in  our  treasury. 
It  would  be  drtrvn  out  by  presentation  of  greenbacks  for  redemption  until,  in  a  year  or 
two  at  furthest  from  the  date  of  redemption,  every  dollar  of  greenbacks  would  be  re- 
deemed and  retired  from  circulation. 

In  addition  to  the  reduction  of  the  currency  by  withdrawal  of  all  the  greenbacks, 
ractional  currency  and  small  bank  notes,  the  National  Banks  must  reduce  their  remain- 
ing circulation  largely  before  the  dread  day  of  resumption.  That  this  is  a  necessary 
result  of  the  law  in  the  opinion  of  the  banks,  is  shown  by  the  operation  of  the  Resump- 
tion Act  for  two  and  a  half  months  after  its  passage,  in  reducing  the  aggregate  of  bank 
circulation  sixteen  millions  of  dollars  in  excess  of  new  issues. 

OUR  SUPPLY  OF  PRECIOUS  METALS. 

We  pay  abroad,  on  National  and  other  securities,  about  one  hundred  and  fifty  millions 
«f  dollars  in  gold  annually.    Seventy-three  per  cent,  of  our  foreign  trade  is  carried  in 
oreign  vessels,  calling  for  about  fifty  millions  of  freight  in  gold  a  year.     Assuming  that 
mnfigrants  bring  in  as  much  gold  each  year  as  our  countrymen  traveling  or  sojourn- 
Jig  abroad  take  from  us,  we  have  a  yearly  debt  to  pay  to  Europe,  out  of  home  resources 
of  two  hundred  millions  of  gold  or  its  equivalent  for  interest  on  bonds  _and  for 


freights.  In  other  words,  we  start  ont  to  trade  with  the  rest  of  the  world  each  year  with 
that  balance  against  as.  We  pay  it  partly  in  gold  and  silver,  partly  in  other  commodi- 
ties, partly  in  making  new  debts.  Our  whole  product  of  gold  and  silver  for  five  years, 
from  1869  to  1873,  was  a  little  lees  than  sixty  millions  a  year.  Our  annual  exports  of 
gold  and  silver  coin  and  bullion  over  our  imports  of  the  same  commodities  are  stated 
by  Mr.  Field  at  an  average  of  sixty  millions:  (last  year  it  was  over  fifty-one  millions, 
and  so  far  this  year  it  is  double  the  rate  of  last.)  Now  deduct  from  our  bullion  product 
twenty  per  cent.,  estimated  as  consumed  here  in  the  arts,  and  we  have  a  net  product  for 
export  or  coinage  of  but  forty-eight  millions— so  that,  notwithstanding  our  large  pro- 
duct of  the  precious  metals,  the  aggregate  of  coin  and  bullion  remaining  in  the  coun- 
try is  steadily  diminishing.  This  statement  is  corroborated  by  the  fact  that  the  gold 
and  silver  in  the  United  States  is  estimated  by  the  Secretary  of  the  Treasury  at  one 
hundred  and  sixty-bix  millions  in  1874,  against  two  hundred  and  eighty-five  millions 
estimated  by  Walker  in  his  "  Science  of  Wealth  "  in  1860. 

We  start  out,  then,  with  such  debt  abroad  as  has  reduced  our  gold  and  silver  to  one 
hundred  and  sixty- six  millions,  and  carries  away  from  our  shores  each  year  more  than 
all  our  product  added  to  all  that  returns  to  us.  Bullion  bought  by  the  Treasury  abroad 
to  prepare  for  redemption  and  withdrawal  of  legal  tenders  may  be  hoarded  until  the 
day  of  resumption,  but  it  will  then  pour  out  and  flow  where  our  growing  foreign  debt, 
and  the  markets  from  which  it  may  be  extracted,  demand  it. 

HOW  MUCH  CURRENCY  WILL  OUR  GOLD  SUPPORT. 

Let  us  see,  then,  what  amount  of  redeemable  currency  can  be  kept  afloat  in  the  United 
States  with  our  present  supply  of  gold  and  our  means  of  keeping  it. 

I  read  from  a  table  showing  the  total  amount  in  dollars  of  the  precious  metals  in  three 
of  the  chief  commercial  nations  of  the  world,  and  of  the  paper  currency  they  are  able 
to  keep  afloat,  prepared  by  me  from  statistics  in  Appleton's  American  Encyclopedia, 
Walkei's  Science  of  Wealth  and  other  authorities.  It  is  to  be  observed  that  the  power 
of  the  banks  to  obtain  and  keep  gold  is  to  a  large  extent  dependent  on  the  amount 

afloat  in  their  respective  countries. 

Total  coin  in  Total  coin  in 

country.  bank. 

Great  Britain,  1872 $685,000,000  ,$125,000,000 

Franco,  1874 760,000,000  157,000,000 

United  States,  1860 285,000,000  83,000,000 

United  States,  1874 166,000,000  10,620,000 

Paper  currency. 

Great  Britain,  1872 $25:2,000,000  Redeemable. 

France,  1874 '. 564,000,000  Not  redeemable. 

United  States,  1860 207,000,000  Redeemable. 

United  States,  1875 741,000,000  Not  redeemable. 

We  all  recollect  the  difficulties  experienced  by  our  banks  before  the  war  in  maintain- 
ing specie  payment  with  one-fourth  of  our  present  volume  of  paper  money  and  nearly 
double  our  present  supply  of  precious  metals,  and  the  disastrous  panics  to  which  our 
system  of  mixed  currency  subjected  us.  If  by  the  Republican  resumption  law  we  re- 
duce our  present  excellent  currency  to  two  hundred  and  seven  millions  of  bank  cur- 
rency (the  quantity  of  paper  money  we  had  before  thio  war),  I  seo  no  reason  to  believe 
that  we  could  maintain  specie  payment  as  successfully  as  we  did  then.  We  then  had  a 
shipping  which  carried  more  than  our  own  commerce,  and  to  which  other  nations  paid 
tribute  in  freights,  and  we  owed  abroad  less  than  five  hundred  millions  of  National, 
State,  municipal  and  other  bonds,  while  we  now  owe  five  times  that  sum,  calling  for 


8 

gold  interest.  For  five  years  prior  to  1860  we  produced  fifty-four  millions  of  the 
precions  metals — nearly  as  much  as  our  present  production.  The  conditions  for  main- 
taining an  icqual  volume  of  redeemable  paper  money  were  certainly  more  favorable 
then  than  now.  Yet  at  that  time  two  hundred  and  seven  millions  was  as  large  an 
amount  of  paper  as  could  be  kept  afloat — not  actually  redeemable,  but  just  "  so  so." 

On  these  facts  I  assert,  without  fear  of  successful  contradiction,  that  this  law  neces- 
sarily involves  not  only  the  cancellation  of  all  the  United  States  notes,  including  frac- 
tional currency,  and  of  the  fifty  millions  of  bank  notes  below  five  dollars,  but  also  a  fur- 
ther reduction  of  the  present  bank  currency  to  about  two  hundred  millions  of  dollars. 

WHAT   GRANT  THOUGHT  ABOUT   IT   IN   1873-74. 

Such  is  the  resumption  law,  and  such  its  inevitable  effects  in  increasing  the  public 
debt,  and  in  changing  the  character  and  shrinking  the  volume  of  our  currency.  Its- 
enactment  is  justified  on  the  assumption  that  our  present  currency  is  bad  in  kind  and 
excessive  in  amount ;  that  a  bank  currency  redeemable  in  specie  will  be  better ;  and 
that  we  are  already  prepared  for  early  resumption.  Each  of  these  propositions  is  un- 
founded. Each  was  strongly  condemned  by  the  Administration  itself  in  the  annual 
message  of  the  President  of  December,  1873,  only  a  year  before  the  passage  of  the  Re- 
sumption Act.  I  read  from  that  message : 

"  The  experience  of  the  present  panic  has  proven  that  the  currency  of  the  country, 
based  as  it  is  upon  the  credit  of  the  country,  is  the  best  that  has  ever  been  devised. 
Usually,  in  times  of  such  trials,  currency  has  become  worthless,  or  so  much  depreciated 
in  value  as  to  inflate  the  values  of  all  the  necessaries  of  life  as  compared  with  the  cur- 
rency. Every  one  holding  it  has  been  anxious  to  dispose  of  it  on  any  terms.  Now  we 
witness  the  reverse.  Holders  of  currency  hoard  it  as  they  did  gold  in  former  experi- 
ences of  a  like  nature. 

"  It  is  patent  to  the  most  casual  observer  that  much  more  currency  or  money  is  re- 
quired to  transact  the  legitimate  trade  of  the  country  during  the  fall  and  winter 
months,  when  the  vast  crops  are  being  removed,  than  during  the  balance  of  the  year. 

"  In  view  of  t^e  great  actual  contraction  that  has  taken  place  in  the  currency,  and 
the  comparative  contraction  continuously  going  on — due  to  the  increase  of  manufacto- 
ries and  all  the  industries — I  do  not  believe  there  is  too  much  of  it  now  for  the  dullest 
period  of  the  year. 

"  A  specie  basis  cannot  be  reached  and  maintained  until  our  exports,  exclusively  of 
gold,  pay  for  our  imports,  interest  due  abroad,  and  other  specie  obligations,  or  so  nearly 
so  as  to  leave  an  appreciable  accumulation  of  the  precious  metals  in  the  country. 

"  To  increase  our  exports  sufficient  currency  is  required  to  keep  all  the  industries  of 
the  country  employed.  Without  this,  National  as  well  as  individual  bankruptcy  must 
ensue." 

This  was  General  Grant's  common  sense  view  of  the  subject  three  months  after  the 
panic.  On  these  suggestions  Congress  acted,  and  passed  a  bill  for  a  small  increase  of 
the  currency,  against  the  combined  opposition  of  the  specie  payment  financiers.  But 
meanwhile  delegations  of  usurers  and  theorists  besieged  the  President,  and  he  surren- 
dered at  discretion.  He  vetoed  the  bill  framed  on  his  own  suggestions,  and  in  his  veto 
message  this  currency  which  he  had  lauded  as  "  the  lest  that  has  even'  "been  devised,"  was 
denounced  as  one  of  the  "  evils  growing  out  of  the  rebellion !"  Thenceforth  he  became 
merely  the  mouth-piece  of  the  money  power. 

THE  MABCH  TO   SPECIE  PAYMEN1   BY   CONTRACTION   FROM   1865   TO   1873. 

To  get  a  full  view  of  the  dangers  which  threaten  us  in  this  march  to  specie  payment, 
it  is  necessary  to  look  back  to  its  origin  and  progress,  and  its  past  and  present  effects 
on  the  business  of  the  country. 

It  was  begun  by  Mr.  McCulloch  in  1865,  at  the  dictation  of  Eoropean  capitalists.  He 
then  had  an  agent  abroad  (Mr.  Lanier)  negotiating  bonds,  who  reported  to  him  that 


9 

"the  feeling  in  favor  of  the  contraction  of  the  currency  was  universally  expressed  as 
the  sole  condition  on  which  our  credit  abroad  could  be  maintained."  Thereupon  the 
contraction  policy  was  adopted.  Gold  that  year  after  the  war  averaged  about  thirty- 
five  per  cent,  premium — our  currency  was  the  largest  we  ever  had — and  the  industries 
of  the  country  in  all  branches  most  prosperous.  Ten  years  have  since  passed — the 
policy  of  contraction  has  been  pursued  at  the  dictation  of  the  money  class  abroad  and 
at  home — gold  is  now  at  sixteen  per  cent,  premium  and  rising — and  the  industries  of 
the  country  lie  prostrate.  If  the  people's  interests,  instead  of  the  demands  of  bond- 
holders, had  controlled  our  money  policy,  the  industries  of  the  country  would  have 
been  still  flourishing,  and  specie  payment  far  nearer  reached  than  now. 

The  state  of  the  currency  October  31,  1865,  may  be  judged  from  the  following  table  of. 
notes  of  all  kinds  then  outstanding.    It  is  from  Spalding's  Finance  History,  page  201  : 

Greenbacks  and  fractional  currency $454,000,000 

State  and  National  bank  notes 250,000,000 

Five  per  cent,  legal  tenders 33,000,000 

Three  per  cent,  certificates  of  indebtedness 56,000,000 

Temporary  certificates 99,000,000 

Seven-thirty  treasury  notes 830,000,000 

Compound  interest  notes « 173,000,000 

$1,895,000,000 

The  floating  war  debt  had  been  substantially  settled,  and  the  bonded  debt  was  but 
$1,162,000,000,  of  which  nearly  all  was  held  in  the  United  States.  The  interest-bearing 
notes  were  all  held  at  home — they  were  bank  reserves,  thus  liberating  non-interest  bear- 
ing currency.  The  interest  due  on  them  was  paid  in  currency.  It  ebbed  and  flowed 
from  the  Treasury  to  the  people  as  interest,  and  from  the  people  back  to  the  Treasury 
as  taxes.  These  notes  were  held  as  investments  or  reserves,  except  at  times  when  large 
transactions  or  a  more  than  ordinary  business  need  of  money  called  them  out  to  perform 
its  office.  They  were  the  reserve  corps  of  the  currency. 

The  consequence  of  having  this  large  amount  of  money  and  interest  notes  held  by  the 
people  was  that,  notwithstanding  we  were  paying  heavier  taxes  than  were  ever  before 
imposed,  there  was  from  1863  to  1866  a  season  of  prosperity  and  freedom  from  personal 
debt  unparalleled  in  our  history.  During  the  eight  years  from  1865  to  1873,  while  the 
population  and  business  of  the  country  were  growing,  a  large  amount  of  legal  tenders 
and  nearly  every  dollar  of  the  eleven  hundred  and  ninety-one  millions  of  Treasury  notes 
bearing  interest — which  had  served  as  currency,  reserve  and  investment  by  turns — were 
withdrawn,  and  the  currency  on  the  30th  of  June,  1873,  stood  as  follows  : 

United  States  notes  and  legal  tenders $416,000,000 

National  Bank  notes 350,000,000 

$766,000,000 
Less  reserve 128,000,000 


Total  available  currency $638,000,000 

The  bonded  debt  had  meanwhile  been  increased  from  one  thousand  one  hundred  and 
•sixty-two  millions  in  1865,  to  one  thousand  seven  hundred  and  thirty-two  millions,  over 
half  of  which  had  been  sold  abroad,  calling  for  about  sixty  millions  of  gold  interest 
annually. 

Thus,  uuder  the  contraction  policy  adopted  and  steadily  pursued  by  the  Republican 
party  from  1865  to  1873,  the  interest  burden  of  the  debt  was  largely  increased  ;  it  was 
changed  from  a  home  debt  payable  in  currency  to  a  foreign  debt  payable  in  gold— the 


10 

interest-bearing  notes  which  had  served  the  people  alternately  as  currency,  bank  re- 
serves and  investments,  were  taken  np,  leaving  a  vastly  smaller  currency,  the  inadequate 
amount  of  which  cramped  business,  checked  enterprise,  and  led  to  the  substitution  of 
credits  with  enormous  interest  to  carry  on  the  enterprises  and  business  of  the  people. 
The  panic  came  and  shook  the  credits,  which  were  a  bad  and  only  partial  substitute  for 
the  destroyed  currency  and  interest  notes,  and  the  business  of  the  country  thereupon 
collapsed. 

WHY   BUSINESS   DOES   NOT   REVIVE. 

Two  years  have  passed  since  the  panic— why  is  there  no  symptom  of  recovery  f  Why 
does  each  season,  compared  with  that  preceding,  tell  of  shrinking  values,  rednctd  man- 
ufactures and  trade,  greater  suffering  among  laborers,  and  bankruptcy  among  producing 
and  trading  capitalists  ?  Why  have  our  exports  fallen  off  a  fourth  ?  Why  are  half  our 
iron  furnaces  out  of  blast ;  our  woolen  and  cotton  factories  closing  ;  our  lands  and  lots 
being  sold  for  taxes  ;  bankruptcies  multiplying  ;  laborers  at  lowered  wages  put  on  half 
work  or  no  work ;  and  the  cry  of  want,  amid  the  abundance  of  God's  bounties,  going 
up  from  every  industrial  center  in  the  land  ? 

It  is  because  "  mon.ey  is  plenty  " — in  the  stagnant  pools  where  craft  dams  it  np,  and 
scarce  in  the  channels  of  business,  where  it  was  wont  to  flow.  It  is  because  capitalists 
know  that  if  the  contraction  policy  be  pursued  the  bottom  is  not  yet  reached,  and  will 
not  be  for  years  after  resumption  ;  that  most  industrial  pursuits,  of  which  money  is  the 
handmaid,  can  not  survive  the  strain  of  the  further  contraction  necessary  to  resumption 
in  1879.  They,  therefore,  hoard  their  money,  or  lend  it  only  on  securities  such  as  ordi- 
nary business  can  not  offer,  waiting  for  the  combined  effects  of  contraction  by  hoarding 
and  contraction  by  the  resumption  law  to  still  further  shrink  or  destroy  all  values  ex- 
cept the  almighty  dollar  and  bond.  They  complacently  bide  their  time,  like  wreckers 
waiting  on  a  dangerous  coast,  till  the  storm  be  past  and  the  ships  lie  foundered  ;  or  like 
vultures  lazily  hovering  till  Death  prepares  their  feast. 

A  STRIKING   PARALLEL — THE  BRITISH   RESUMPTION   LAW. 

That  I  do  not  err  in  attributing  the  business  disasters  of  the  past  few  years  to  the 
measures  for  specie  payments,  nor  exaggerate  the  evils  in  store  for  us  if  this  resumption 
law  be  executed,  is  shown  by  the  history  of  resumption  in  England  after  her  war  with 
Napoleon,  which  is  a  striking  parallel  to  our  own  experience. 

Great  Britain  suspended  specie  payment  from  1797  to  (in  effect)  1823 — twenty-six 
years.  That  suspension  enabled  her  to  conduct  her  great  war  and  send  vast  snma  of 
gold  to  the  Continent  to  pay  troops  and  aid  allies  without  the  slightest  disturbance  of 
her  home  currency;  and  during  that  war  her  home  industries  and  her  foreign  commerce 
grew  more  than  in  any  equal  period  of  her  history.  Napoleon  said  she  conqmere^  him 
"  with  her  spindles^'  The  war  ended  in  1815.  The  paper  issues  vrere  large,  credits 
extended,  and  the  banks  unprepared  for  resumption  ;  but  the  cry  was  raised,  "  On  to 
specie  payments."  Accordingly,  in  1819,  four  years  after  the  close  of  the  war,  an  a«t 
was  passed  to  resume  specie  payment  in  1823 — giving  the  British  people  just  as  long  a 
notice  as  has  been  given  us. 

Sir  Archibald  Alison,  in  his  History  of  Europe  (second  series,  vol.  2,  pages  144-45), 
says: 

"  The  effects  of  this  extraordinary  piece  of  legislation  were  soon  apparent.  The  in- 
dustry of  the  nation  was  speedily  congealed,  as  a  flowing  stream  is  by  the  severity  of  an 
Arctic  winttr.  The  alarm  became  as  universal  and  wide-spread  as  confidence  and 
activity  had  recently  been.  The  country  bankers,  who  had  advanced  largely  on  the 


11 

stocks  of  goods  imported,  refused  to  continue  their  support  to  their  customers,  and  they 
were  forced  to  bring  their  stocks  into  the  market.  Prices  in  consequence  fell  rapidly  ; 
that  of  cotton,  iu  particular,  sank  in  three  months  to  half  its  former  level.  The  entire 
circulation  of  England  fell  from  $232,000,000  in  1818  to  $174,000,000  in  1820,  and  in  the 
succeeding  year  it  sank  as  low  as  $142,000,000. 

"  The  effects  of  this  sudden  and  prodigious  contraction  of  the  currency  were  soon  ap- 
parent, and  they  rendered  the  next  three  years  a  period  of  ceaseless  distress  and  suffer- 
ing in  the  British  Islands.  The  accommodation  granted  by  bankers  diminished  so  much 
in  consequence  of  the  obligation  laid  upon  them  to  pay  in  specie,  which  was  not  to  be 
got,  that  the  paper  under  discount  at  the  bank  of  England,  which  in  1813  had  been 
$103,300,000,  sank  in  1820  to  $23,350,000 !  and  in  1821  to  $13,610,000  !  The  effect  upon 
prices  was  not  less  immediate  or  appalling.  They  declined  in  general,  within  six 
months,  to  half  their  former  amount,  and  remained  at  that  low  level  f  *r  the  next  three 
years.  Distress  was  universal  in  the  latter  months  of  1819,  and  that  distrust  and  dis- 
couragement were  felt  in  all  branches  of  industry  which  are  at  once  the  forerunner  and 
the  cause  of  disaster." 

Doubleday,  in  his  "  Financial,  Monetary  and  Statistical  History  of  England,"  says  : 
"  We  have  already  seen  the  fall  in  prices  produced  by  the  immense  aarrowing  of  the 
paper  circulation.  The  distress,  ruin  and  bankruptcy  which  now  took  place  were  uni- 
versal, affecting  the  great  interests  both  of  land  and  trade  ;  but  especially  among  land- 
lords whose  estates  were  burdened  by  mortgages,  settlements,  legacies  and  the  like,  the 
effects  were  most  marked.  In  hundreds  of  cases,  from  the  tremendous/edoction  which 
took  place  in  the  price  of  land,  the  estates  barely  sold  for  as  much  as  would  pay  off  the 
mortgages,  and  the  owners  were  stripped  of  all  and  made  beggars." 

In  1822,  three  years  after  the  passage  of  the  Resumption  Act,  and  one  year  before  it 
was  to  go  into  full  effect,  the  distress  of  all  the  industrial  classes  became  so  great  that 
a  committee  of  the  House  of  Commons  was  appointed  to  consider  the  subject,  which 
reported  that  in  consequence — not  of  "  over-production"  or  "  over-trading,"  as  was  alleged  by 
the  bullionists—but  solely  of  the  contraction  of  the  currency,  resulting  from  the  mere  passage  of 
the  act—a  contraction  in  three  years  of  forty  per  cent.— the  price  of  labor  and  all  its  pro- 
ducts, with  scarcely  an  exception,  had  fallen  in  a  still  greater  proportion.  The  commit- 
tee further  say  : 

"  In  the  midst  of  this  fall  of  prices,  what  operation  in  business  could  proceed  without  loss  or 
ruin  f  There  has  teen  no  form  in  which  the  capital  of  the  merchant,  none  in  which  the  capital 
of  the  manufacturer,  could  be  invested  without  the  half  of  it  being  sacrificed  during  this  calamit- 
ous period.  We  have  been  thrown  back  upon  a  condition  of  society  in  which  all  industry  and 
enterprise  have  been  rendered  pernicious  or  ruinous,  and  where  no  property  is  safe  unlexs  hoarded 
in  the  shape  of  money  or  lent  to  others  on  a  double  security." 

The  result  was  that  the  theorists  and  usurers  of  Great  Britain  were  compelled,  a  year 
before  their  act  of  resumption  was  to  go  into  effect,  to  amend  one  of  its  most  distressing 
features  providing  for  the  extinction  of  the  small  notes — a  provision  copied  into  our  re- 
sumption law — by  extending  the  time  of  their  retirement  to  1833. 

Fellow-citizens !  If  there  be  value  to  us  in  the  experisnce  of  other  nations,  does  not 
this  page  of  British  history  warn  us  against  attempting  resumption  by  contracting  the 
currency  after  the  plan  of  her  usurers  and  theorists  f  She  attempted  it  when  gold  waa 
but  three  per  cent,  premium,  and  her  circulation  but  two  hundred  and  thirty-two  mil- 
lions. Ricardo,  the  oracle  of  the  bullionists,  said  it  would  do  no  great  ii  jury  to  any 
one,  as  it  merely  involved  the  raising  of  the  value  of  bank  paper  three  per  cent.,  while 
the  event  proved  that  it  involved  a  contraction  of  the  currency  forty-five  per  cent.,  and 


12 

of  business  credits  eighty-seven  per  cent.,  bringing  in  its  train  the  ruin  ot  manufacturers, 
tradesmen,  merchants,  fanners,  and  the  degradation  of  the  laboring  masses  to  pauperism. 
M.  Leon  Say,  the  French  Minister  of  Finance,  cites  the  disasters  to  the  industries  of 
Great  Britain,  resulting  from  the  act  of  resumption,  as  a  warning  to  France  not  to  fix 
at  present  a  time  for  specie  payment,  though  her  currency  is  at  par  with  gold,  and  her 
people  hold  more  of  the  precious  metals  than  any  other  nation.  Our  theorists  and 
usurers  are  leading  us  to  even  greater  misfortunes  than  befell  Great  Britain — as  our 
currency  is  over  three  times  that  of  hers  when  her  resumption  act  was  passed — the  pre- 
mium on  gold  five  times  greater — and  the  reduction  of  the  currency,  instead  of  being 
ninety  millions,  will  be  over  five  hundred  millions.  The  holders  of  the  public  funds 
forced  resumption  there  as  here.  The  second  Peel,  whom  the  Irish  Catholics  called 
"  Orange  Peel,"  was  the  mouth-piece  of  the  bnllionists,  who  advocated  the  bill  in  the 
name  of  "  the  public  honor."  His  patriot  father  said  to  him  when  it  was  passed, 
"Robert,  you  have  made  the  fortunes  of  your  family,  but  ruined  your  country." 

REPEAL. 

Shall  this  resumption  act.  be  executed  T  Will  the  people  suffer  the  money-lords  here, 
by  the  same  false  cry  of  public  konor,  to  make  the  fortunes  of  their  families  and  ruin 
their  country  ?  Never !  Let  Ohio,  standing  in  the  center,  cry  out  Repeal !  Pennsyl- 
vania and  Virginia  will  answer  back  Repeal !  And  from  every  State  where  the  Missis- 
sippi ga'thers  its  waters  will  come  the  cry,  Repeal !  Repeal ! !  Repeal ! ! ! 

The  Ohio  Democracy  demand  that  this  whole  plan  of  resumption  be  abandoned ;  that 
the  contraction  of  the  currency  cease ;  that  the  National  Bank  Notes  be  canceled  and 
greenbacks  issued  in  their  place,  thus  saving  the  people  eighteen  millions  annually ; 
that  legal  tenders  be  given  increased  value  by  making  them  receivable  for  half  the 
customs  ;  that  the  volume  of  currency  be,  by  some  prudent  and  intelligent  method,  ad- 
justed to  and  kept  equal  with  the  growing  demands  of  trade,  and  that  the  restoration, 
of  legal  tenders  to  par  with  gold  be  brought  about  by  promoting  the  industries  of  the 
people,  and  not  by  destroying  them. 

FALSE   CRY  OP   REPUDIATION. 

The  usurers  and  theorists  declare  that  this  means  repudiation.  Does  it,  and  why  f 
Because,  they  say,  the  customs  are  pledged  for  the  interest  on  the  public  debt,  and  must 
therefore  be  wholly  paid  in  gold.  But,  as  Judge  Thurman  has  shown,  the  customs 
amount  regularly  to  full  twice  the  interest  on  the  debt  (which  we  do  not  propose  to  in- 
crease), and,  therefore,  half  the  customs  will  yield  gold  enough  to  pay  the  interest. 
They  say  it  would-be  a  violation  of  contract  to  take  the  circulation  from  the  National 
Banks.  But  the  last  section  of  the  law  under  which  they  were  organized  reserves  to 
Congress  the  right  to  amend  or  repeal  it  at  pleasure.  They  say  the  Government  is 
bound  to  redeem  and  pay  the  greenback  in  gold,  as  it  was  taken  on  the  faith  of  that 
promise.  I  answer  it  was  never  taken  as  a  public  debt,  'but  only  as  a  legal  tender.  It 
goes  from  hand  to  hand — is  mine  to-day  and  yours  to-morrow.  I  doubt  if  there  be  a 
man  in  America  who  ever  took  a  greenback  on  the  promise  of  payment  in  coin.  Every 
one  takes  it  solely  because  it  is  receivable  for  all  debts  and  exchangeable  for  all  values. 

But  if  the  holder  of  the  greenback  be  regarded  as  an  investor  in  public  fands — which 
he  is  not — still  to  redeem  this  money  in  gold,  to  the  detriment  of  the  business  of  the  coun- 
try, were  a  monstrous  wrong.  The  greenback  was  issued  because  the  Government  could 
not  pay  its  current  debts  in  coin.  The  formal  promise  on  the  face  of  the  bill  fixes  no  day 


13 

of  redemption;  and  all  takers  and  holders  know  they  are  to  be  redeemed  only  when  the 
interests  of  the  public  shall  permit.  The  people's  interest  must  be  consulted ;  and  doubly 
so  because  they  chiefly  hold  the  greenbacks  from  day  to  day,  and  also  chiefly  owe  the 
debts,  own  the  property,  and  do  the  business  to  be  affected  injuriously  by  forced  resump- 
tion. There  is  a  faith  due  to  the  people  as  well  as  to  the  holders  of  public  securities. 
In  the  language  of  Edmund  Burke,  "  It  is  to  the  property  of  the  citizen,  and  not  to  the  de- 
mands of  the  creditor  of  the  State,  that  the  original  faith  of  society  is  pledged.  The  claim  of  the 
citizen  is  prior  in  time,  paramount  in  title,  superior  in  equity." 

WHO  SHOULD  DETERMINE  THE  AMOUNT  OF  CIRCULATION  ? 

Bnt  who  shall  determine  what  quantity  of  currency  the  business  of  the  country  re- 
quires t  The  Democracy  of  Ohio  say  the  people,  who  do  the  business,  and  are  the  sov- 
ereigns. The  institution  of  money  is  conventional,  and  its  establishment  and  regulation 
a  sovereign  prerogative.  Why  should  the  people  surrender  this  sovereign  power  which 
determines  the  distribution  of  their  wealth  to  the  mere  chance  of  gold  production,  or  the 
vicissitudes  of  European  crops  or  politics,  or  the  interests  of  incorporated  money-lendersf 
The  money  power  does  not  distinctly  deny  the  fitness  of  the  people  to  make  war  or  peace ; 
to  determine  all  questions  of  person  or  property;  to  regulate  all  the  rights  and  duties  of 
man  within  the  scope  of  civil  government.  But  they  demand  that  the  people  shall  abdi- 
cate in  their  favor  the  sovereign  power  of  controlling  the  money  of  domestic  commerce 
on  the  insolent  assumption  that  they  are,  and  the  people  are  not,  capable  of  regulating  it. 

The  chatter  about  Confederate  and  Continental  money,  French  assignats',  "rags," 
etc.,  does  not  deserve  serious  answer.  The  Confederate  and  Continental  currency  were 
issued  by  Rebel  Governments,  when  their  cause  was  desperate,  their  people  poor,  and 
public  loans  impracticable  at  home  or  abroad,  and  when  excessive  issues  of  notes  were 
resorted  to  as  a  last  resonrce  of  despair.  The  French  assignats  were  based  on  the  con- 
fiscated property  of  the  church  and  nobility,  and  lost  all  value  when  the  Revolution 
itself  was  overturned,  and  the  confiscated  property  restored  to  its  original  owners.  Our 
Republic  is  the  firmest  Government  on  earth,  regardful  of  public  honor,  with  credit  at 
home  and  abroad,  and  nine-tenths  of  the  people  are  property-holders,  with  the  conserva- 
tive tendency  which  follows  the  possession  of  property.  Such  a  people,  under  such  cir- 
cumstances, will  not  run  into  wild  extravagance  in  this  any  more  than  in  any  other  pol- 
icy of  government.  They  are  used  to  power — have  nsed  it  wisely  and  honestly — and 
will  use  it  on  this  money  question  in  spite  of  the  contempfcuoas  jeers  of  the  minions  of 
the  money  power. 

WHAT   SHOULD   BE   THE   LIMIT   OF   CIRCULATION  T 

It  is  said  the  Ohio  Democracy  demand  an  issue  of  greenbacks  unlimited  and  illimita- 
ble ;  and  that  an  excessive  issue  will  sink  their  value,  and  be  in  effect  repudiation. 

But  our  platform  prescribes  a  limit — the  requirements  of  business.  Recently,  in  New 
York,  a  member  of  Congress— not  our  Buckeye  abroad,  Sam  Cox — denounced  our  plat- 
form as  one  of  wild  inflation,  and  in  the  same  breath  declared  that  we  already  have 
more  greenbacks  than  the  wants  of  trade  demand.  I  answered  that  if  it  be  true  we 
have  more  currency  than  business  requires,  our  platform  demands  contraction,  and  there- 
fore he  should  favor  it. 

The  elements  of  our  material  growth  are  thirty  billions  of  property,  and  the  labor 
which  by  use  of  property  produces  seven  billions  of  wealth  annually — about  seven-eighths 
of  which  product  is  consumed  in  living  expenses.  The  business  of  production  and  ex- 
change is  now  done  with  seven  hundred  and  forty  millions  of  curreucy — which  is  its  life- 


blood,  keeping  afloat  and  discharging  fifty  times  its  sum  of  commercial  transactions. 
We  say  this  body  of  business  shall  have  all  the  blood  it  needs  for  healthy  action  and 
growth.  Either  the  wants  of  trade  must  determine  the  limits  of  currency,  or  the  arbi- 
trary limit  of  currency  will  determine  the  volume  of  trade.  Which  shall  bo  subordinate  ? 
If  our  position  be  wrong,  the  converse  must  be  true,  and  the  business  be  cut  down  to  the 
dimensions  of  the  foreordained  currency.  It  were  as  sensible  to  cut  down  the  business 
of  onr  railway -system  to  meet  the  capacity  of  an  arbitrarily  fixed  quantity  of  rolling 
stock  ;  or  to  reduce  the  acreage  of  crops  in  the  country  by  fixing  an  arbitrary  number  of 
mowers  and  threshers  ;  or,  after  the  custom  of  Chinese  women,  to  limit  the  growth  of 
the  foot  to  a  prescribed  size  of  shoe. 

HOW   SHALL   IT   BE    DETERMINED! 

How  shall  the  volume  of  currency  be  adapted  to  the  wants  of  the  trade?  That  is  a 
practical  questioa  not  in  issue  in  thia  canvass.  If  the  people  declare  it  shall  be  done,  the 
how  can  be  left  to  their  representatives,  or  to  future  popular  discussion.  I  thiak,  and 
for  five  years  past  have  publicly  advocated,  that  the  Government  should  i^sne  a  bond 
bearing  an  interest  about  equal  to  the  average  net  increase  of  wealth  in  the  United 
States — say  3  65  per  cent,  per  annam — which  would  be  one  cent  a  day  on  each  one  hun- 
dred dollars,  into  which  bond  legal  tenders  may  at  any  time  be  converted,  and  which 
shall  be  itself  convertible  into  legal  tenders  at  the  option  of  the  holder.  When  currency 
becomes  scarce  these  bonds  would  be  converted  into  money ;  and,  when  money  grows 
too  plenty,  the  bonds  would  absorb  the  surplus.  The  business  of  the  country  would 
thus  determine  and  obtain  for  itself  the  amount  of  currency  necessary  for  its  use,  with- 
out arbitrary  interference,  and  it  would  never  be  either  glutted  or  starved ;  while  the 
low  rate  of  interest  on  the  interchangeable  bond  would  abate  the  usury  which  is  the 
bane  of  our  social  system.  This  is  one  proposed  method  of  adjusting  the  quantity  of 
currency  to  the  demands  of  business.  It  has  not  the  sanction  of  either  of  the  great  par- 
ties, but  has  been  indorsed  by  the  late  Treasurer  of  the  United  States,  and  by  many  of 
the  most  eminent  financiers,  statesmen  and  business  men  of  the  country,  and  is  strongly 
recommended  by  our  experience  with  our  interest-bearing  notes  about  the  close  of  the 
war,  before  our  home  currency  debt  was  made  a  foreign  gold  debt,  and  the  policy  was 
inaugurated  of  giving  to  the  banks  control  of  the  people's  money. 

LEGAL   TENDERS    CONSTITUTIONAL. 

Bat  it  is  claimed  that  the  proposed  issue  of  legal  tenders  is  unconstitutional.  I  will 
not  consider  the  objection  here  further  than  to  say  that  the  Supreme  Court  of  the  United 
States,  in  the  legal  tender  cases  at  the  December  term,  1870,  decided  the  acts  authoriz- 
ing their  issue  constitutional.  The  Court  did  not  hold  the  issue  valid  because  it  was  a 
means  of  executing  the  grant  of  tear  powers,  but  because  it  was  an  act  not  prohibited  by 
the  Constitution,  and  "  calculated  to  effect  one  of  the  objects  intrusted  to  the  Govern- 
ment." If  a  new  issue  of  legal  tenders,  to  take  the  place  of  bank  notrs,  or  supply  a 
deficiency  in  the  currency,  be  found  au  appropriate  means  of  enabling  the  Government 
to  carry  and  pay  its  debt  and  expenses,  it  would  be  fully  sustained  by  the  reasoning  of 
the  Court  in  pronouncing  that  decision. 

DEMOCRATIC   TRADITIONS. 

Some  Democrats  think  our  pi  it*;.'  n>  a  i'  ,  rom  the  traditions  of  the  party.    The 

statesman  who  did  more  th\n  all  others  to  i..x  Democratic  principles  in  our  Constitution, 
the  father  of  Democracy — Thomas  Jefferson — has  spoken  on  an  issue  almost  identical 
with  this.  About  tho  close  of  the  war  of  1812  the  people  were  heavily  burdened  with  two 


A     000104024     5 

war  debts ;  the  Continental  money  had  been  dishonored,  and  eight  hundred  banks  fur- 
nished the  entire  currency  of  the  country.  He  then  declared,  as  a  proper  measure  of 
relief  for  the  people,  that  "  Bank  paper  should  be  suppressed,  and  the  circulation  restored  to  the 
nation,  to  whom  it  belongs."  He  said,  "  Congress  may  now  brorwv  of  the  public,  without  interest, 
all  the  money  they  want,  to  the  extent  of  a  competent  circulation  ;"  and  he  further  proposed 
that  such  National  currency  should  be  a  legal  tender  for  all  public  dues,  and  convertible 
at  the  option  of  the  holder  into  Government  bonds.  Later,  when  the  Government  was 
free  from  debt,  and  the  people  had  no  burdens  to  be  lightened  by  an  issue  of  Govern- 
ment notes — such  as  they  had  in  Jefferson's  day  and  now  have — Jackson  and  Benton 
fought  against  the  Banks,  and  demanded  "  hard  money  ''  rather  than  the  "  rag  money." 
Bat  Democrats  who  now  quote  them  are,  in  effect,  fighting/or  the'Banks,  with  the  same 
catch-words.  "  The  letter  killeth  ;  but  the  spins  givelh  life  !" 

TICKS   OF   PROPOSED   BANK   CURRENCY. 

We  can  not  have  a  currency  composed  largely  or  exclusively  of  gold — that  is  admitted 
on  all  sides.  We  have  only  a  choice  between  two  systems  of  paper  money  :  bank  money 
nominally  redeemable  in  gold  after  January  1,  lfc?9,  and  legal  tenders  redeemable  at  the 
pleasure  of  the  Government. 

The  chief  considerations  respecting  the  bank  money  system  are  : 

1.  It  is  a  device  to  supplement  the  acknowledged  deficiency  of  coin  with  a  credit 
currency,  at  the  risk  and  cost  of  the  people,  and  for  the  aggrandizement  of  monopolies. 

2.  It  is  founded  on  the  false  pretense  that  one  dollar  in  gold  will  redeem  three  dollars 
in  paper  and  five  dollars  in  deposits.    Whenever  a  panic,  accidental  or  contrived,  occurs, 
the  juggle  fails,  and  brings  confusion  and  loss  to  the  business  built  on  it.     Mr.  Page,  of 
the  Bank  of  England,  characterizes  this  mixt-d  currency  as  "  a  grand  system  of  insidious 
swindling." 

3.  It  will  reduce  onr  currency  to  aboat  a  quarter  of  its  already  reduced  volume,  be- 
cause of  the  small  and  steadily  diminishing  supply  of  gold  in  the  United  States. 

4.  The  struggle  of  the  batiks  to  "iioard  gold  will  successfully  keep  it  out  of  circula- 
tion, and  leave  us  only  such  meager  supply  of  currency  as  the  banks  dare  keep  afloat. 

5.  The  system  is,  by  constitution,  panicky.    It  is  a  currency  of  three  parts  paper  and 
five  parts  deposits,  built  on  one  part  gold.     The  gold  foundation  is  as  unstable  as  water ; 
as  fickle  and  volatile  as  mercury.     It  is  here  this  month,  in  England  next,,  in  France 
next,  wherever  the  winds  of  war,  or  craft,  or  traffic  blow  it.     Our  banks  could  no  more 
control  its  export  than  they  could  control  the  crops,  or  finances  or  politics  of  Europe, 
which  cause  its  export.    The  shipment  of  gold  would  come  directly  from  the  banks, 
for  ther^  It  would  be  stored,  subject  to  demand  of  depositors  and  note-holders.      Mr. 

-.on,  iu  his  "  Science  of  Finance,"  says :  "  When  the  stock  of  gold  in  the  Bank  of 
(1  is  jit  its  oil.;.:;!:  r  level,  the  export  of  ti-n  or  fifteen  millions  suffices  to  produce 
a  derth  of  money  aud  a  eenu>;.<  commercial  .crisis."  We  exported  this  year,  to  the  15th 
of  July,  fifty-five  millions  of  goiu.  Under  this  proposed  bank  system,  and  with  our 
frequent  large  shipments  of  gold,  cramps,  j  ;;'iics,  suspensions,  and  consequent  disaster 
to  business,  would  be  the  rule,  and  an  even  course  cf  business  the  exception. 

THE   CURRENCY   NEEDED   FOR   OUR  FOKKIGX   COMMERCE. 

This  convulsive  currency  is  demanded  in  the  interests  of  our  foreign  commerce.  Oar 
home  exchanges  are  over  thirty  billions  of  dollars  annually  ;  our  foreign  exchanges  less 
than  a  billion.  Our  commerce  on  the  Ohio  doubtless  surpasses  that  on  the  seas.  Shall 


16 

the  wants  of  our  home  or  of  our  foreign  trade  determine  the  character  of  the  National 
currency  ?    Shall  the  dog  wag  the  tail,  or  the  tail  wag  the  dog  T 

But  I  deny  that  our  foreign  commerce  would  be  promoted  by  a  currency  so  unfit  for 
domestic  business.  There  is  no  "  money  of  the  world."  There  is  a  product — gold — iu 
which  balances  of  trade  between  nations  are  generally  settled.  Our  National  currency 
should  bear  as  steady  a  relation  to  a  given  weight  and  fineness  of  that  product  as  the 
unstable  value  of  gold,  arising  from  the  fitful  changes  of  demand,  will  permit.  It  is  the 
stability  of  relation  of  the  currency  to  gold,  and  not  the  equality  of  our  paper  dollar  tcitk 
our  gold  dollar,  that  the  wants  of  foreign  trade  require.  The  best  assurance  of  National 
solvency,  honor,  and  commercial  power,  is  in  a  home  currency  which  will  fill,  without 
paroxysms  of  drouth  or  overflow,  the  channels  of  domestic  industry. 

CONCLUSION. 

Fellow -citizen,  the  Ohio  Democracy  has  called  a  halt  in  the  march  of  the  Republican 
administration  to  the  equalization  of  the  currency  with  gold,  and  demands  that  another 
and  better  route  shall  be  taken.  The  two  roads  are  widely  divergent.  One  leads  through 
years  of  individual  bankruptcy,  prostration  of  business,  riot  of  usurers,  impoverishment 
and  degradation  of  the  masses ;  to  the  establishment-of  a  currency  meager  in  quantity, 
inferior  in  character,  and  controlled  by  monopolies  in  a  few  money  centers,  whose  power 
will  make  them  lords  and  the  people  serfs.  The  other  leads  through  industrial  activity, 
abatement  of  usury,  employment  of  labor  and  diffusion  of  wealth,  to  the  establish- 
ment of  an  exclusively  National  currency,  controlled  by  the  people  with  a  due  regard  to 
all  obligations  of  honor  and  to  the  equal  interest  of  all  sections  and  classes.  Which 
road  shall  we  take  ?  Shall  we  plunge  on  for  four  years  through  the  Serbonian  bog  in 
which  the  industries  of  the  country  are  now  struggling  and  sinking,  or  march  by  the 
pleasant  and  solid  paths  of  prosperity  and  thrift  f 


